1
00:00:02,759 --> 00:00:06,320
Speaker 1: This is Bloomberg Daybreak Asia for this Thursday, February two

2
00:00:06,519 --> 00:00:09,880
Speaker 1: in Hong Kong, Wednesday February one in New York and

3
00:00:10,000 --> 00:00:12,480
Speaker 1: coming up this hour, Chair J. Powell says the Fed

4
00:00:12,560 --> 00:00:15,560
Speaker 1: has made progress in fighting inflation, but he is warning

5
00:00:15,720 --> 00:00:19,040
Speaker 1: more rate hikes are still needed. Meta reports better than

6
00:00:19,120 --> 00:00:23,640
Speaker 1: expected sales as Facebook gains more users and Donnie Enterprises

7
00:00:23,680 --> 00:00:26,279
Speaker 1: will not go ahead with its record two point four

8
00:00:26,320 --> 00:00:29,280
Speaker 1: billion dollar share sale. McCarthy says he feels he and

9
00:00:29,280 --> 00:00:31,880
Speaker 1: the President can find common ground on the dead ceiling.

10
00:00:32,080 --> 00:00:35,640
Speaker 1: Former US Defense secretary says plan for a real possibility

11
00:00:35,640 --> 00:00:38,600
Speaker 1: of conflict with China. I'm at Baxter with Global News

12
00:00:38,800 --> 00:00:41,640
Speaker 1: Manchester United moves one step closer to its first trophies

13
00:00:41,640 --> 00:00:45,040
Speaker 1: since two thousand seventeen on Dan Schwartzman. I'll have that story.

14
00:00:45,120 --> 00:00:52,320
Speaker 1: More coming up in Bloomberg Sports. That's all straight ahead

15
00:00:52,440 --> 00:00:56,240
Speaker 1: on Bloomberg Daybreak Asia on Bloomberg eleven and three on

16
00:00:56,360 --> 00:01:01,320
Speaker 1: New York, Bloomberg, Washington, d C, bloom one six one, Boston,

17
00:01:01,480 --> 00:01:05,640
Speaker 1: Bloomberg nine six, San Francisco, Sirius x M one nineteen

18
00:01:05,880 --> 00:01:08,760
Speaker 1: and around the world on Bloomberg Radio dot Com and

19
00:01:08,920 --> 00:01:15,960
Speaker 1: via the Bloomberg Business app. Good morning, I'm dead prisoner

20
00:01:16,160 --> 00:01:19,120
Speaker 1: and I'm Brian Curtis. Here are the stories we're following today.

21
00:01:19,920 --> 00:01:23,280
Speaker 1: The FED slowed its drive to rein in inflation policymakers,

22
00:01:23,280 --> 00:01:25,880
Speaker 1: lifting the Fed's target for the benchmark rate but twenty

23
00:01:25,880 --> 00:01:28,080
Speaker 1: five basis points to a range of four and a

24
00:01:28,120 --> 00:01:30,840
Speaker 1: half to four and three quarters per cent. The smaller

25
00:01:30,840 --> 00:01:33,920
Speaker 1: move followed a half point increase back in December and

26
00:01:34,040 --> 00:01:38,280
Speaker 1: four jumbo sized bases point hikes prior to that. The

27
00:01:38,360 --> 00:01:42,400
Speaker 1: Fed noted that inflation has eased somewhat but remains elevated.

28
00:01:42,880 --> 00:01:45,840
Speaker 1: After the decision, chere J. Powell was asked whether he

29
00:01:45,920 --> 00:01:50,040
Speaker 1: was worried about the recent market rally creating easier financial

30
00:01:50,040 --> 00:01:53,760
Speaker 1: conditions that could hamper his fight against inflation. He chose

31
00:01:53,920 --> 00:01:57,120
Speaker 1: not to push back hard. It is important that overall

32
00:01:57,160 --> 00:02:00,240
Speaker 1: financial conditions continue to reflect the policier strength that we're

33
00:02:00,280 --> 00:02:03,040
Speaker 1: putting in place in order to bring inflation at two percent,

34
00:02:03,680 --> 00:02:06,800
Speaker 1: and of course financial conditions have it tightened very significantly

35
00:02:06,800 --> 00:02:09,840
Speaker 1: over the past year. I would say that our focus

36
00:02:09,919 --> 00:02:12,359
Speaker 1: is not on short term moves, but on sustained changes

37
00:02:12,400 --> 00:02:15,239
Speaker 1: the broader financial conditions, and it is our judgment that

38
00:02:15,320 --> 00:02:19,120
Speaker 1: we're not yet in a sufficiently restrictive policy stance, which

39
00:02:19,200 --> 00:02:22,120
Speaker 1: is why we say that we expect ongoing hikes will

40
00:02:22,160 --> 00:02:25,080
Speaker 1: be appropriate. Peal added that it's gratifying to see the

41
00:02:25,160 --> 00:02:29,000
Speaker 1: disinflationary process now getting underway, but he said that officials

42
00:02:29,040 --> 00:02:32,200
Speaker 1: would need substantially more evidence that inflation was on a

43
00:02:32,320 --> 00:02:37,160
Speaker 1: sustained downward path before they could declare victory. Very interesting

44
00:02:37,200 --> 00:02:39,960
Speaker 1: that he chose to use the word disinflation a number

45
00:02:39,960 --> 00:02:41,799
Speaker 1: of times today, and I think Brian to be fair,

46
00:02:41,840 --> 00:02:44,840
Speaker 1: if you take a broader view, you'll see that financial

47
00:02:44,840 --> 00:02:48,520
Speaker 1: conditions are notably tighter than they were about a year ago. Now.

48
00:02:48,680 --> 00:02:51,120
Speaker 1: The Chairman may have intended to emphasize the need to

49
00:02:51,160 --> 00:02:53,400
Speaker 1: do a lot more when it comes to taming inflation,

50
00:02:53,480 --> 00:02:57,520
Speaker 1: but as we indicated earlier, markets today simply weren't buying it. Here,

51
00:02:57,560 --> 00:03:01,560
Speaker 1: as black rocks Jeff Rosenberg, there's a real disconnect between

52
00:03:01,760 --> 00:03:04,680
Speaker 1: you know, what he said, what the statement said, maybe

53
00:03:04,680 --> 00:03:07,280
Speaker 1: what he wanted to say, and what the markets heard.

54
00:03:07,440 --> 00:03:10,440
Speaker 1: But what the markets heard was this issue of the

55
00:03:11,000 --> 00:03:14,880
Speaker 1: conflict between financial conditions easing and whether or not that

56
00:03:14,960 --> 00:03:19,760
Speaker 1: would impact the FEDS policymaking. He dismissed it, so let's

57
00:03:19,800 --> 00:03:21,720
Speaker 1: be polite. Then, I think it's fair to say that

58
00:03:21,800 --> 00:03:25,119
Speaker 1: markets are doubting the FEDS projections. FED funds. Now see

59
00:03:25,160 --> 00:03:27,720
Speaker 1: the FED only getting to five percent in so far

60
00:03:27,840 --> 00:03:30,720
Speaker 1: as a terminal rate. And then and then here's the

61
00:03:30,800 --> 00:03:35,040
Speaker 1: interesting thing, cutting by fifty basis points between now and

62
00:03:35,120 --> 00:03:37,200
Speaker 1: the end of the year. On the other hand, the

63
00:03:37,280 --> 00:03:39,320
Speaker 1: FED things that can get to a rate of around

64
00:03:39,360 --> 00:03:42,080
Speaker 1: five and a quarter percent and then hold it there

65
00:03:42,080 --> 00:03:47,280
Speaker 1: through the remainder. Does some corporate news meta platforms reporting

66
00:03:47,320 --> 00:03:50,760
Speaker 1: better than expected sales during the holiday quarter. We get

67
00:03:50,800 --> 00:03:54,000
Speaker 1: that story from Bloombridge Charlie Pillett. Met Us saw strong

68
00:03:54,080 --> 00:03:57,480
Speaker 1: demand for advertising. Has it attracted more users to its

69
00:03:57,520 --> 00:04:00,560
Speaker 1: Facebook social network, it said. Revel You for the fourth

70
00:04:00,640 --> 00:04:03,960
Speaker 1: quarter was thirty two point two billion dollars. That compared

71
00:04:04,040 --> 00:04:07,160
Speaker 1: with Wall Street estimates of thirty one point six billion.

72
00:04:07,600 --> 00:04:11,280
Speaker 1: CEO Mark Zuckerberg said Matta is making progress with its

73
00:04:11,320 --> 00:04:16,040
Speaker 1: investments in artificial intelligence, particularly for improving the videos that

74
00:04:16,160 --> 00:04:20,520
Speaker 1: shows users on Facebook and Instagram. The company is recovering

75
00:04:20,600 --> 00:04:23,800
Speaker 1: from the worst year for its stock in history. In

76
00:04:23,920 --> 00:04:27,240
Speaker 1: New York. Charlie Pellett Bloomberg Daybreak, Asian all right, Charlie.

77
00:04:27,279 --> 00:04:29,640
Speaker 1: So it's all about earnings. We get that. Today Morgan

78
00:04:29,720 --> 00:04:33,880
Speaker 1: Stanley chief US equity strategist Mike Wilson was saying investors

79
00:04:33,920 --> 00:04:38,320
Speaker 1: could see several more quarters of disappointing results, and he

80
00:04:38,400 --> 00:04:41,440
Speaker 1: told us the first quarter is where we could see

81
00:04:41,480 --> 00:04:46,560
Speaker 1: an acceleration. Earnings are disappointing everywhere. Okay, this is one

82
00:04:46,560 --> 00:04:48,479
Speaker 1: of the worst streets and earnings we've seen in quite

83
00:04:48,480 --> 00:04:51,200
Speaker 1: a while. And people are now saying, oh, it's better

84
00:04:51,240 --> 00:04:53,000
Speaker 1: than feared in this end the other that's like saying

85
00:04:53,000 --> 00:04:54,920
Speaker 1: a tornado ripped through your house and saying, oh, we

86
00:04:55,040 --> 00:04:57,560
Speaker 1: only knocked out the bedroom. I mean you earns are

87
00:04:57,600 --> 00:05:00,440
Speaker 1: bad and you need to be honest about at and

88
00:05:00,480 --> 00:05:02,000
Speaker 1: you need to say, do I really want to own

89
00:05:02,040 --> 00:05:05,000
Speaker 1: a company where the margins are degrading like this and

90
00:05:05,040 --> 00:05:06,880
Speaker 1: I don't really know where the bottom is yet. I'm

91
00:05:06,880 --> 00:05:09,279
Speaker 1: just gonna trust it's going to get better. That's a

92
00:05:09,440 --> 00:05:11,400
Speaker 1: that's not a great investment philosophy in our but you

93
00:05:11,400 --> 00:05:13,960
Speaker 1: particularly give where evaluations are now. Alright, so what do

94
00:05:14,040 --> 00:05:17,920
Speaker 1: earnings mean for the overall market? Well, think back s

95
00:05:17,960 --> 00:05:20,039
Speaker 1: and P five hundred was up more than six percent

96
00:05:20,080 --> 00:05:23,680
Speaker 1: of the month of January and Wilson is essentially saying

97
00:05:23,720 --> 00:05:27,360
Speaker 1: that people were lured into believing reality is different than

98
00:05:27,360 --> 00:05:30,359
Speaker 1: what it is. He also compared last month's move to

99
00:05:30,440 --> 00:05:33,119
Speaker 1: the beginning of two thousand one, when the market also

100
00:05:33,279 --> 00:05:37,280
Speaker 1: saw a rerating of tech stocks. You know, Doug, I

101
00:05:37,320 --> 00:05:40,520
Speaker 1: think that the FED chief was not really devish today,

102
00:05:40,680 --> 00:05:43,520
Speaker 1: insomuch as I think he was less hawkish than what

103
00:05:43,600 --> 00:05:46,680
Speaker 1: people had feared, and he did actually talk about a

104
00:05:46,760 --> 00:05:49,760
Speaker 1: soft landing. He hasn't really talked that much about it.

105
00:05:49,960 --> 00:05:53,320
Speaker 1: He's only talked about conquering inflation. And yes, he did

106
00:05:53,320 --> 00:05:57,680
Speaker 1: not scold markets because financial conditions have eased a little bit.

107
00:05:58,000 --> 00:06:01,120
Speaker 1: And actually what you said is two. He did say

108
00:06:01,160 --> 00:06:03,840
Speaker 1: that that financial conditions were tougher now than they were

109
00:06:03,839 --> 00:06:06,960
Speaker 1: a year ago. He even said they're not much easier

110
00:06:07,520 --> 00:06:09,599
Speaker 1: than at the time of the last FED meeting. Now

111
00:06:09,640 --> 00:06:12,440
Speaker 1: the consensus as will stocks have been running higher, but

112
00:06:12,520 --> 00:06:15,240
Speaker 1: the SMP five D right now is almost where it

113
00:06:15,360 --> 00:06:19,880
Speaker 1: was two months ago in December around So yes, we

114
00:06:19,920 --> 00:06:22,360
Speaker 1: had a big fall in December and then we had

115
00:06:22,400 --> 00:06:25,120
Speaker 1: a big rise in January, but net net were almost

116
00:06:25,120 --> 00:06:27,000
Speaker 1: at the same level. And I think the other point

117
00:06:27,000 --> 00:06:29,560
Speaker 1: of contention between what the FED is saying, and what

118
00:06:29,640 --> 00:06:32,000
Speaker 1: the market is indicating is that rate cuts are on

119
00:06:32,040 --> 00:06:34,360
Speaker 1: the table between let's say, before the end of the year.

120
00:06:34,440 --> 00:06:39,000
Speaker 1: Powell seemed to push back against that notion pretty aggressively today,

121
00:06:39,040 --> 00:06:44,120
Speaker 1: Although if the economy were to somehow collapse or kind

122
00:06:44,120 --> 00:06:46,400
Speaker 1: of move into a recession that was so deep, maybe

123
00:06:46,400 --> 00:06:48,719
Speaker 1: the FED wouldn't have a choice but to do that. Yeah,

124
00:06:48,760 --> 00:06:51,359
Speaker 1: he said, their data dependent, and I think everybody believes it.

125
00:06:51,400 --> 00:06:54,520
Speaker 1: Now we've got a lot more ahead. We'll be talking

126
00:06:54,640 --> 00:06:58,320
Speaker 1: about this with Chris Konstantino's coming up from Riverfront Investment

127
00:06:58,800 --> 00:07:01,560
Speaker 1: and a little bit more time to flesh out exactly

128
00:07:01,600 --> 00:07:04,880
Speaker 1: where the Fed's head is at the moment. Time for

129
00:07:04,920 --> 00:07:09,560
Speaker 1: Global News US House speaking, Kevin McCarthy says he feels

130
00:07:09,640 --> 00:07:12,560
Speaker 1: his first budget meeting with President Joe Biden was very

131
00:07:12,600 --> 00:07:15,640
Speaker 1: positive and Baxter has Global News in the nine News

132
00:07:15,760 --> 00:07:19,200
Speaker 1: at San Francisco, ed. Yeah, exactly right. Brian McCarthy says

133
00:07:19,240 --> 00:07:22,640
Speaker 1: he and the President found areas of agreement as well

134
00:07:22,680 --> 00:07:25,960
Speaker 1: as disagreement, and their first meeting today regarding the dead

135
00:07:26,000 --> 00:07:28,520
Speaker 1: ceiling and the budget, I can see where we can

136
00:07:28,520 --> 00:07:31,960
Speaker 1: find common ground. I think the American public would appreciate that,

137
00:07:32,200 --> 00:07:35,600
Speaker 1: and we look. I've been very I've been very clear

138
00:07:35,840 --> 00:07:39,560
Speaker 1: the current path way on we cannot sustain. We got

139
00:07:39,560 --> 00:07:41,960
Speaker 1: to change the directory to put ourselves on a path

140
00:07:42,040 --> 00:07:45,800
Speaker 1: to balance how we get there will be our discussions now.

141
00:07:45,800 --> 00:07:48,320
Speaker 1: White House spokes and when Karine Jean Pierre says a

142
00:07:48,400 --> 00:07:51,680
Speaker 1: position on raising the dead ceiling is very clear. We

143
00:07:51,800 --> 00:07:54,760
Speaker 1: see this as a constitutional obligation that they that they

144
00:07:54,800 --> 00:07:58,480
Speaker 1: have the Congress has to act. Yeah, so at least

145
00:07:58,520 --> 00:08:02,160
Speaker 1: they've had their first discussion. US Ambassador of the United

146
00:08:02,240 --> 00:08:05,480
Speaker 1: Nations Linda Thomas Greenfield, is calling for an overhaul of

147
00:08:05,480 --> 00:08:08,960
Speaker 1: the Security Council in the U n to blunt Moscow's impact.

148
00:08:09,360 --> 00:08:12,920
Speaker 1: Exclusively here on Bloomberg. Greenfield said the body has been

149
00:08:12,960 --> 00:08:16,320
Speaker 1: able to move power outside the Council to accomplish a

150
00:08:16,440 --> 00:08:21,680
Speaker 1: number of things. One an overwhelming vote condemning their annexations

151
00:08:21,720 --> 00:08:25,920
Speaker 1: are attempted annexations. UH In Ukraine, we kicked them off

152
00:08:26,080 --> 00:08:32,360
Speaker 1: of the You and Human Rights Commission, and we're continuing

153
00:08:32,440 --> 00:08:36,559
Speaker 1: to put pressure on them and isolate them in New York. Meanwhile,

154
00:08:36,559 --> 00:08:39,200
Speaker 1: the US as it will supply Ukraine with long Arrange

155
00:08:39,320 --> 00:08:42,640
Speaker 1: artillery ammunition as part of a new two billion dollar

156
00:08:42,679 --> 00:08:46,640
Speaker 1: package of military assistance, and Greenfield also commented briefly on

157
00:08:46,800 --> 00:08:50,400
Speaker 1: China and human rights, saying that it is exerting inordinate

158
00:08:50,440 --> 00:08:55,280
Speaker 1: pressure on human rights discussions among nations. Former US Defense

159
00:08:55,280 --> 00:08:58,959
Speaker 1: Secretary Mark Esper says the US, along with Taiwan, need

160
00:08:59,040 --> 00:09:01,920
Speaker 1: to prepare for the real possibility of war with China.

161
00:09:02,320 --> 00:09:05,600
Speaker 1: Asper on Bloomberg's balance of powers, as Taiwan has already

162
00:09:05,880 --> 00:09:08,800
Speaker 1: started working on ground defenses. We want to avoid a

163
00:09:08,840 --> 00:09:12,840
Speaker 1: fight with China for all kinds of reasons military, economic, political,

164
00:09:12,840 --> 00:09:14,960
Speaker 1: and so on. But if it comes to that, then

165
00:09:15,080 --> 00:09:17,040
Speaker 1: we we need to have folks on the ground. The

166
00:09:17,040 --> 00:09:20,000
Speaker 1: Taiwan's need to stock powder goods because the West will

167
00:09:20,040 --> 00:09:22,080
Speaker 1: not be able to resupply them like we we like

168
00:09:22,120 --> 00:09:24,960
Speaker 1: we've been able to with with Ukraine. Asper says, China

169
00:09:24,960 --> 00:09:28,360
Speaker 1: has been watching what is going on in Ukraine very carefully,

170
00:09:28,400 --> 00:09:31,440
Speaker 1: and the football goat the greatest of all time. Tom

171
00:09:31,480 --> 00:09:35,000
Speaker 1: Brady has retired again, he says, for now for good,

172
00:09:35,800 --> 00:09:39,000
Speaker 1: so monetarily, he doesn't need any pity parties if you're

173
00:09:39,000 --> 00:09:42,360
Speaker 1: thinking about planning when Bloomberg. Scarlet Food says three hundred

174
00:09:42,440 --> 00:09:45,599
Speaker 1: seventy five million dollars with Fox over ten years and

175
00:09:45,720 --> 00:09:47,960
Speaker 1: even waiting for him because it was signed after his

176
00:09:48,080 --> 00:09:50,600
Speaker 1: first retirement, and you know it's for whenever he decides

177
00:09:50,600 --> 00:09:53,000
Speaker 1: to stop playing. But what's interesting about that deal is

178
00:09:53,040 --> 00:09:56,720
Speaker 1: it's more money than he's made playing football. So he's

179
00:09:56,760 --> 00:09:59,280
Speaker 1: going to be the highest paid sports broadcaster, maybe the

180
00:09:59,360 --> 00:10:03,000
Speaker 1: highest pain caster period. Scarlett says. Uh. Scarlett says that

181
00:10:03,000 --> 00:10:05,679
Speaker 1: they have been constant focus on Fox all the way

182
00:10:05,720 --> 00:10:08,839
Speaker 1: through the season, so next year, so we won't get

183
00:10:08,840 --> 00:10:11,800
Speaker 1: tired of him. Right in San Francisco, I'm met by

184
00:10:11,840 --> 00:10:15,640
Speaker 1: Extra Global newspower by more than twenty journalists and analysts

185
00:10:15,640 --> 00:10:19,520
Speaker 1: and over one hundred twenty countries. This is Bloomberg. This

186
00:10:19,640 --> 00:10:22,640
Speaker 1: is Bloomberg Debra Kaja and Brian Curtis along with Rashad

187
00:10:22,720 --> 00:10:27,119
Speaker 1: Salamat and our guest is Chris Constantino's chief investment strategist

188
00:10:27,240 --> 00:10:31,480
Speaker 1: at Riverfront Investment Group. So Chris the FED chief talked

189
00:10:31,520 --> 00:10:35,400
Speaker 1: about disinflation in goods, that it's it's real. He talked

190
00:10:35,440 --> 00:10:40,679
Speaker 1: about seeing disinflation likely to be coming in housing services

191
00:10:41,120 --> 00:10:45,560
Speaker 1: but none yet in core services ex housing, and what

192
00:10:45,640 --> 00:10:49,800
Speaker 1: he's talking about there is basically wages. But it was

193
00:10:49,880 --> 00:10:53,320
Speaker 1: good because he's talking about a soft landing your general

194
00:10:53,320 --> 00:10:55,600
Speaker 1: impression from what you got today from the Fed in

195
00:10:55,640 --> 00:10:59,200
Speaker 1: the chief. Yeah. Sure, and by the way, thanks guys

196
00:10:59,240 --> 00:11:01,839
Speaker 1: for having me today. Um yeah, I think my take

197
00:11:01,920 --> 00:11:04,400
Speaker 1: on the FED today, the general read was a little

198
00:11:04,400 --> 00:11:07,680
Speaker 1: bit of a dubbish surprise maybe. UM. I think for

199
00:11:07,880 --> 00:11:11,960
Speaker 1: two reasons, and you mentioned earlier on the program quite rightfully.

200
00:11:12,480 --> 00:11:14,760
Speaker 1: The first one is, you know his quote around our

201
00:11:14,800 --> 00:11:17,720
Speaker 1: focus is not on short term moves, but on sustained

202
00:11:17,800 --> 00:11:22,040
Speaker 1: changes to financial conditions. You know, the markets ripped started

203
00:11:22,080 --> 00:11:25,719
Speaker 1: to RiPP not long after that, because it sounded to

204
00:11:25,880 --> 00:11:28,280
Speaker 1: listeners like Powell was kind of shrugging off the risks

205
00:11:28,320 --> 00:11:31,920
Speaker 1: of of that financial conditions tightening we've talked about. The

206
00:11:32,000 --> 00:11:35,360
Speaker 1: second thing, maybe more important, was you know, you're you're

207
00:11:35,760 --> 00:11:40,360
Speaker 1: exactly uh your reference to his use the word disinflationary,

208
00:11:40,480 --> 00:11:43,880
Speaker 1: this disinflationary process. So you know, you could view that

209
00:11:44,400 --> 00:11:48,200
Speaker 1: as debbish. But I think there's also potentially a third

210
00:11:48,280 --> 00:11:51,320
Speaker 1: read here, which is that you know, the markets may

211
00:11:51,360 --> 00:11:54,120
Speaker 1: have misunderstood him a little bit because we've seen this

212
00:11:54,200 --> 00:11:57,520
Speaker 1: happen uh to uh FED chairman's before, We've seen it

213
00:11:57,559 --> 00:11:59,520
Speaker 1: happen to power before, where you know, he's tried to

214
00:11:59,520 --> 00:12:02,439
Speaker 1: communicate a message and and and markets heard what they

215
00:12:02,440 --> 00:12:04,520
Speaker 1: wanted to hear, and then usually over the next forty

216
00:12:04,520 --> 00:12:08,839
Speaker 1: eight hours, markets kind of sort back through um the statements,

217
00:12:09,000 --> 00:12:11,520
Speaker 1: and then of course a bunch of other FED governors

218
00:12:11,559 --> 00:12:13,480
Speaker 1: come out and kind of get trotted out to help

219
00:12:13,520 --> 00:12:16,120
Speaker 1: massage the message of the markets get their head around it. Um.

220
00:12:16,160 --> 00:12:18,040
Speaker 1: One thing I'm pretty sure of is that how doesn't

221
00:12:18,120 --> 00:12:20,240
Speaker 1: want to be known as the FED share who allowed

222
00:12:20,280 --> 00:12:23,760
Speaker 1: inflation to become ingrained. And so I still think he's

223
00:12:23,800 --> 00:12:25,480
Speaker 1: he's trying to walk that tight rope, and I think

224
00:12:25,480 --> 00:12:28,440
Speaker 1: he's gonna eventually air on the side of being you know,

225
00:12:28,440 --> 00:12:31,480
Speaker 1: maybe overtightening versus under Chris Chrise. I mean, it's there's

226
00:12:31,520 --> 00:12:34,080
Speaker 1: also a situation where you know, the markets just don't

227
00:12:34,120 --> 00:12:35,800
Speaker 1: want to believe him in some ways, and you know,

228
00:12:35,920 --> 00:12:38,360
Speaker 1: the thing is probably not it's probably better to get

229
00:12:38,400 --> 00:12:41,280
Speaker 1: your desired results by misleading them. I mean, could you

230
00:12:41,400 --> 00:12:43,720
Speaker 1: argue that the FED is perhaps done raising rates and

231
00:12:43,760 --> 00:12:47,200
Speaker 1: it wants to keep it just wants people out there

232
00:12:47,200 --> 00:12:51,760
Speaker 1: to believe otherwise. M that's an interesting theory. UM. It's

233
00:12:51,760 --> 00:12:56,080
Speaker 1: certainly sort of a three dimensional chess match, if you will, UM,

234
00:12:56,160 --> 00:12:57,880
Speaker 1: But I don't know. I mean, I think the modern

235
00:12:57,920 --> 00:13:00,960
Speaker 1: FED has tried to be as transparent as possible. I

236
00:13:01,000 --> 00:13:03,560
Speaker 1: think back in the Greenspan days and earlier, there was

237
00:13:03,640 --> 00:13:05,760
Speaker 1: you know, three and four dimensional chess going on with

238
00:13:05,760 --> 00:13:07,960
Speaker 1: what they said and didn't say. But I think the

239
00:13:08,000 --> 00:13:10,400
Speaker 1: modern FED or this FED is trying to be as

240
00:13:10,440 --> 00:13:13,440
Speaker 1: transparent as they can. Um. But you can only be

241
00:13:13,480 --> 00:13:15,880
Speaker 1: so transparent in a you know, a short presser, right.

242
00:13:16,320 --> 00:13:20,080
Speaker 1: I think I think many of many investors would see

243
00:13:20,120 --> 00:13:22,360
Speaker 1: him is still hawkish because even though we talked about

244
00:13:22,360 --> 00:13:25,240
Speaker 1: the disinflation and goods and that disinflation was coming in

245
00:13:25,320 --> 00:13:27,880
Speaker 1: housing services, he said that's less than fifty percent of

246
00:13:27,920 --> 00:13:33,000
Speaker 1: the total. The other no disinflation, and so that means

247
00:13:33,040 --> 00:13:36,319
Speaker 1: that they will stay vigilant. M I agree. I think

248
00:13:36,320 --> 00:13:39,040
Speaker 1: that the bugaboo here is going to come down to wages.

249
00:13:39,120 --> 00:13:42,440
Speaker 1: Right for most small and medium sized businesses in America,

250
00:13:42,559 --> 00:13:47,120
Speaker 1: that is their number one cost input and um, you know,

251
00:13:47,160 --> 00:13:48,920
Speaker 1: and this is the place where I think businesses have

252
00:13:49,000 --> 00:13:52,560
Speaker 1: struggled because wages, particularly on the lower end, you know,

253
00:13:52,640 --> 00:13:57,240
Speaker 1: demand for workers is so dramatic still in those areas

254
00:13:57,480 --> 00:14:00,640
Speaker 1: that um, you know, it's a big constraint for or businesses,

255
00:14:00,720 --> 00:14:03,760
Speaker 1: so um, you know, the data I like to track.

256
00:14:03,800 --> 00:14:05,760
Speaker 1: You know, the n f I b M has a

257
00:14:05,800 --> 00:14:09,600
Speaker 1: propensity to raise wages survey that they've been putting on

258
00:14:09,640 --> 00:14:11,840
Speaker 1: for decades now, and that's data that here at Riverfront

259
00:14:11,880 --> 00:14:14,240
Speaker 1: we like to track. You know, that has moderated a

260
00:14:14,320 --> 00:14:17,760
Speaker 1: little bit recently, but it's still really really high relative

261
00:14:17,800 --> 00:14:20,480
Speaker 1: to history. And that suggests to me that wage you know,

262
00:14:20,480 --> 00:14:23,880
Speaker 1: wages are going to remain um, you know, pretty pretty

263
00:14:23,880 --> 00:14:26,840
Speaker 1: sticky for the type being. So tells Chris, how you

264
00:14:27,000 --> 00:14:29,000
Speaker 1: the moment trading to the market. Um, I think that

265
00:14:29,040 --> 00:14:34,800
Speaker 1: you have something called patty and it's not a woman. Correct. Yeah,

266
00:14:34,840 --> 00:14:38,040
Speaker 1: that's thanks for bringing that up. That's the acronym that

267
00:14:38,120 --> 00:14:41,160
Speaker 1: I've been using to try to communicate that. I think

268
00:14:41,200 --> 00:14:43,800
Speaker 1: we're in a new era. UM. If the old era

269
00:14:44,040 --> 00:14:46,960
Speaker 1: was of stock investing, was you know, own as much

270
00:14:47,240 --> 00:14:49,240
Speaker 1: as much growth stocks as you can stand and then

271
00:14:49,280 --> 00:14:51,960
Speaker 1: buy more. You know, Tina, there is a non alternative

272
00:14:52,000 --> 00:14:55,640
Speaker 1: to growth stocks in a very very low uh nominal growth,

273
00:14:55,720 --> 00:14:58,600
Speaker 1: low interest rate environment. I think the new era is patty,

274
00:14:58,640 --> 00:15:01,640
Speaker 1: which stands or pay attention to yield. I think for

275
00:15:01,680 --> 00:15:03,720
Speaker 1: the next foreseeable future, and I think this could be

276
00:15:03,720 --> 00:15:06,240
Speaker 1: with us for years to come. Um, a little bit

277
00:15:06,240 --> 00:15:08,640
Speaker 1: like the nineteen seventies. I think that investors are going

278
00:15:08,680 --> 00:15:11,240
Speaker 1: to get a fair amount of their total return in

279
00:15:11,320 --> 00:15:13,960
Speaker 1: stocks and fixed income from the compounding of the yield

280
00:15:13,960 --> 00:15:16,680
Speaker 1: and not so much from betting that. You know that

281
00:15:16,800 --> 00:15:19,840
Speaker 1: valuation multiples are going to go higher, and so I

282
00:15:19,840 --> 00:15:22,160
Speaker 1: think in this era you want to focus on on

283
00:15:22,280 --> 00:15:25,600
Speaker 1: business models that generate cash flow and tend to consistently

284
00:15:25,600 --> 00:15:30,880
Speaker 1: return those two shareholders and Meta jump to almost after hours.

285
00:15:31,160 --> 00:15:33,080
Speaker 1: Part of that was the stronger sales part of it

286
00:15:33,200 --> 00:15:39,800
Speaker 1: to buy back which one is more important? Um? Great question. Um.

287
00:15:39,840 --> 00:15:41,840
Speaker 1: You know, my my compliance department doesn't like me to

288
00:15:41,880 --> 00:15:44,120
Speaker 1: talk about individual stocks, but I will talk about the

289
00:15:44,160 --> 00:15:47,520
Speaker 1: Internet sector of the whole. And I think my personal

290
00:15:47,600 --> 00:15:49,520
Speaker 1: view on this is I think the market is laser

291
00:15:49,560 --> 00:15:53,880
Speaker 1: focused on toplight growth here because you know, financial engineering

292
00:15:53,920 --> 00:15:55,480
Speaker 1: tends to get a lower multiple, but if you can

293
00:15:55,520 --> 00:15:57,840
Speaker 1: generate higher revenue, which has been an issue for any

294
00:15:57,840 --> 00:16:02,320
Speaker 1: of these types of companies. This is Bloomberg Daybreak Asia,

295
00:16:02,400 --> 00:16:04,960
Speaker 1: your morning brief on the stories making news from Hong

296
00:16:05,000 --> 00:16:07,720
Speaker 1: Kong to Singapore and Wall Street. Look for us on

297
00:16:07,800 --> 00:16:12,280
Speaker 1: your podcast feed every day, on Apple, Spotify and anywhere else.

298
00:16:12,320 --> 00:16:14,960
Speaker 1: You get your podcast. You can also listen live each

299
00:16:15,000 --> 00:16:17,960
Speaker 1: day on Bloomberg eleven three oh in New York, Bloomberg

300
00:16:18,800 --> 00:16:22,160
Speaker 1: in Washington, Bloomberg one oh six one in Boston, and

301
00:16:22,200 --> 00:16:26,240
Speaker 1: Bloomberg nine sixty in San Francisco. Our flagship New York

302
00:16:26,280 --> 00:16:30,120
Speaker 1: station is also available on your Amazon Alexa devices. Just

303
00:16:30,360 --> 00:16:34,160
Speaker 1: say Alexa play Bloomberg eleven thirty plus listen coast to

304
00:16:34,200 --> 00:16:38,320
Speaker 1: coast on the Bloomberg Business app, Sirius XM Channel one nineteen,

305
00:16:38,720 --> 00:16:42,120
Speaker 1: the I Heart Radio app, and on Bloomberg dot Com.

306
00:16:42,120 --> 00:16:44,960
Speaker 1: I'm Bryan Curtis and I'm Doug Krisner. Join us again

307
00:16:45,000 --> 00:16:47,000
Speaker 1: tomorrow for all the news you need to start your

308
00:16:47,120 --> 00:16:51,520
Speaker 1: day right here on Bloomberg day Break Asia